SHANGHAI, Sept. 2 (SMM) – Performance of base metals have been sluggish during recent days, with losses being reported for all on the first trading day of September. Investors will be cautious before release of the critical US non-farm employments data, and no sign of significant improvement for the data is seen at present, making it a hidden tumor for US economy. Meanwhile, long confidence and capital will fall short as investors expect no compromise of inflation-fighting policies in China, and this is expected to negatively influence performance of these metals through out September.
Main domestic factors to influence performance of metals in Shanghai are macro economic data for August. If August CPI hits a new high, rate-hike expectations will again exert pressure on metals market. If the figure sees significant drop which indicates alleviated inflation pressure, a rebound for base metals may be well on the way. However, with most industry players expecting only a slight drop from July, investors can not be very optimistic toward September markets given a sluggish world economy.
On the global side, despite better-than-expected US manufacturing data, New York base metals reported moderate losses overnight as investor nerves were kept tight before release of the critical US non-farm employments data. Even though the US Institute for Supply Management released better-than-expected August Manufacturing Purchasing Mangers Index on September 1st indicating US manufacturing industry is still expanding, the White House still lowered its forecast for US GDP growth in 2011 to 1.7%. It also expects US GDP to grow by 2.6% and 3.5% during 2012 and 2013 respectively.
The August non-farm employment report is scheduled to come out today, and economists expect an 80,000 growth for non-farm employments in the country while unemployment rate is expected to stay at 9.1%. If the US Department of Labor provides an optimistic non-farm employment report, base metals may see a moderate rebound. But investors won’t risk their money at present.